BPCL plans to raise $500 million via bonds

Mumbai: State-run Bharat Petroleum Corp. Ltd (BPCL) will shortly hit the market to raise $500 million to partly fund its planned capital expenditure of Rs8,000 crore for this fiscal, two people aware of the development said.

“We are planning to raise $500 million shortly. We are still working on the timeline and the instrument we would be using to raise the funds,” a senior BPCL official said on condition of anonymity as he is not allowed to speak to reporters.

BPCL did not reply to an emailed questionnaire sent on Tuesday.

BPCL is expanding all its four refineries at Kochi, Bina, Mumbai and Numaligarh and the capital is being raised to fund these expansions.

In a note to stock exchanges on 17 October, BPCL said it was planning to raise up to Rs2,000 crore during the current financial year through private placement of unsecured non-convertible debentures, subject to marketing conditions.

“The debentures are proposed to be listed on debt market segment of the BSE and NSE. The details of the issue viz, class of investors, issue price, tenor, interest rate, etc. will depend on the market conditions which will be intimated on crystallization of the issue,” BPCL had said in its statement to the BSE.

“In all probability BPCL would go in for dollar-denominated bonds to raise $500 million,” said an investment banker aware of the development, declining to be named.

After it received ‘Maharatna’ status on 12 September, BPCL will be able to raise cheaper funds and make investments of up to Rs5,000 crore in a single project going forward. It earlier held Mini-ratna status.

BPCL has decided to invest Rs1.08 trillion over the next five years to expand operations across business segments. It is optimistic about the petrochemicals segment and plans to invest around Rs45,000 crore in the business over five years.

The company has commissioned an integrated refinery expansion project (IREP) at its Kochi refinery which would increase its refining capacity to 15.5 million metric tonnes per annum (mtpa) from 9 million mtpa at present. Post commissioning and stabilisation of IREP, BPCL is expecting gross refining margin to improve by $1.50-2 per barrel.

BPCL has invested Rs16,000 crore in the IREP project.

BPCL shares fell 0.58% to Rs507.35 on BSE, while the exchange’s benchmark Sensex surged 1.33% to 33,042.50 points.

Bharat Petroleum